Texas 2009 - 81st Regular

Texas Senate Bill SB921 Compare Versions

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1	1	By: Fraser S.B. No. 921
2	2	Substitute the following for S.B. No. 921:
3	3	By: Solomons C.S.S.B. No. 921
4	4
5	5
6	6	A BILL TO BE ENTITLED
7	7	AN ACT
8	8	relating to access by the members of electric cooperatives to
9	9	meetings of the boards of directors and certain information of the
10	10	electric cooperatives.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 161.002, Utilities Code, is amended by
13	13	adding Subdivision (2-a) to read as follows:
14	14	(2-a) "Board meeting" means a deliberation between a
15	15	quorum of the voting board, or between a quorum of the voting board
16	16	and another person, during which electric cooperative business or
17	17	policy over which the board has responsibility is discussed or
18	18	considered, or during which the board takes formal action. The term
19	19	does not include the gathering of a quorum of the board at a social
20	20	function unrelated to the business of the cooperative, or the
21	21	attendance by a quorum of the board at a regional, state, or
22	22	national convention or workshop, ceremonial event, or press
23	23	conference, if formal action is not taken and any discussion of
24	24	cooperative business is incidental to the social function,
25	25	convention, workshop, ceremonial event, or press conference.
26	26	SECTION 2. Subchapter A, Chapter 161, Utilities Code, is
27	27	amended by adding Section 161.006 to read as follows:
28	28	Sec. 161.006. NONAPPLICABILITY. The following sections of
29	29	this chapter do not apply to an electric cooperative of which one or
30	30	more members is another electric cooperative:
31	31	(1) Sections 161.072(d) through (m);
32	32	(2) Sections 161.075(a), (d), (e), and (f);
33	33	(3) Section 161.0751;
34	34	(4) Section 161.077(d);
35	35	(5) Section 161.080;
36	36	(6) Section 161.081;
37	37	(7) Section 161.082;
38	38	(8) Section 161.126; and
39	39	(9) Section 161.127.
40	40	SECTION 3. Subsection (b), Section 161.064, Utilities Code,
41	41	is amended to read as follows:
42	42	(b) The bylaws may contain any provision for the regulation
43	43	and management of the affairs of the electric cooperative that is
44	44	consistent with the articles of incorporation and this chapter.
45	45	SECTION 4. Section 161.072, Utilities Code, is amended by
46	46	adding Subsections (c) through (m) to read as follows:
47	47	(c) Director elections shall be conducted in a manner that
48	48	is fair and open to all members of the electric cooperative.
49	49	(d) A board committee of a cooperative with more than
50	50	170,000 members may not cast a member's proxy vote in a director
51	51	election.
52	52	(e) A director who is standing for reelection to the board
53	53	of a cooperative with not more than 170,000 members may not serve on
54	54	a committee established under the bylaws for the purpose of
55	55	casting, or being authorized to cast, the proxy vote of a member in
56	56	a director election.
57	57	(f) A member's proxy vote may be cast in a director election
58	58	only if:
59	59	(1) a proxy form is sent by regular mail to each member
60	60	of record not later than the 30th day before the date of the meeting
61	61	at which proxy votes are counted;
62	62	(2) the proxy form designates each candidate who is an
63	63	incumbent director;
64	64	(3) an exact copy of the proxy form is posted on the
65	65	cooperative's Internet website, if the cooperative maintains a
66	66	website;
67	67	(4) the proxy form includes information describing the
68	68	process by which proxy votes are authorized and cast, including:
69	69	(A) the name of each member of the committee, if
70	70	any, established under the bylaws for the purpose of casting proxy
71	71	votes in a director election;
72	72	(B) the process prescribed in the bylaws for
73	73	selecting members to serve on the committee; and
74	74	(C) the districts represented by each committee
75	75	member, if applicable; and
76	76	(5) the proxy form contains the following statements,
77	77	in bold type:
78	78	(A) "If you grant the committee your proxy, you
79	79	are giving the committee full authority to vote your proxy for the
80	80	candidates you selected, or, if you did not select any candidates,
81	81	to vote your proxy for candidates the committee selects";
82	82	(B) "You may rescind your proxy at any time
83	83	before votes are cast at the meeting to elect directors"; and
84	84	(C) "State law prohibits any person from using
85	85	incentives or other enticements to encourage you to provide your
86	86	proxy in any board election."
87	87	(g) Subsections (d) and (f) may not be construed as limiting
88	88	the right of an individual member to collect or cast the proxy votes
89	89	of another member in a director election, if allowed by the bylaws.
90	90	(h) This section may not be construed as limiting the use of
91	91	a proxy as provided by Section 161.069 to establish a quorum to
92	92	transact business other than the election of a director.
93	93	(i) A person may not use an incentive or other enticement to
94	94	encourage a member to authorize another person to cast the member's
95	95	proxy vote in a director election.
96	96	(j) A cooperative with more than 170,000 members may elect
97	97	directors only by district. A member may vote for a director to
98	98	represent a district only if the member resides in that district.
99	99	(k) A cooperative with more than 170,000 members may
100	100	nominate qualified members as candidates in a director election
101	101	only through a written petition by members. The bylaws must:
102	102	(1) specify the number of printed names and dated
103	103	signatures a petition nominating a candidate must contain;
104	104	(2) specify a period within which a petition
105	105	nominating a candidate must be submitted to the cooperative; and
106	106	(3) specify that only members residing in a district
107	107	may sign a petition for the nomination of a candidate to represent
108	108	that district.
109	109	(l) If the bylaws of a cooperative with not more than
110	110	170,000 members allow a committee of members to nominate qualified
111	111	members as candidates in a director election, the bylaws must also:
112	112	(1) allow nominations to be made through one or more
113	113	written petitions by members;
114	114	(2) specify the number of printed names and dated
115	115	signatures a petition nominating a candidate must contain; and
116	116	(3) specify a period within which a petition
117	117	nominating a candidate must be submitted to the cooperative.
118	118	(m) A petition submitted under Subsection (l) must provide
119	119	on the petition the name and address of the member seeking
120	120	nomination and, if the cooperative nominates or elects directors by
121	121	district, the district the member seeks to represent.
122	122	SECTION 5. Section 161.075, Utilities Code, is amended to
123	123	read as follows:
124	124	Sec. 161.075. BOARD MEETINGS. (a) The board shall hold a
125	125	regular or special board meeting at the place and time specified in
126	126	[on] the notice required by Section 161.0751 and [prescribed by]
127	127	the bylaws.
128	128	(b) The attendance of a director at a board meeting
129	129	constitutes a waiver of notice to the director of the meeting unless
130	130	the director attends the meeting for the express purpose of
131	131	objecting to the transaction of business at the meeting because the
132	132	meeting is not lawfully called or convened.
133	133	(c) A notice or waiver of notice of a board meeting given to
134	134	a director is not required to specify the business to be transacted
135	135	at the meeting or the purpose of the meeting.
136	136	(d) Except as provided by this section, each member of the
137	137	electric cooperative is entitled to attend a regular or special
138	138	board meeting. A person who is not a member of the cooperative may
139	139	not attend a regular or special board meeting.
140	140	(e) At the board's discretion, the board may convene an
141	141	executive session to which the members do not have access to
142	142	deliberate and take action on sensitive matters, such as matters
143	143	involving confidential personnel information, contracts, lawsuits,
144	144	real estate transactions, competitively sensitive information,
145	145	information related to the security of the electrical system or the
146	146	cooperative, or other privileged, confidential, or proprietary
147	147	information.
148	148	(f) The board shall reconvene the open session of the
149	149	regular or special board meeting to announce the final action taken
150	150	on a matter discussed in executive session, except matters
151	151	involving confidential personnel information, real estate
152	152	transactions, competitively sensitive information, or security
153	153	information.
154	154	(g) The board secretary or person designated by the
155	155	secretary shall make and keep written minutes of each regular or
156	156	special board meeting.
157	157	(h) The board shall adopt and comply with procedures for
158	158	providing a member with access to the entirety of a regular or
159	159	special board meeting, other than an executive session.
160	160	(i) The board secretary or person designated by the
161	161	secretary shall make and keep a written or audio record of each
162	162	executive session. The secretary shall preserve the record for at
163	163	least two years after the session. The record must include:
164	164	(1) a statement of the subject matter of each
165	165	deliberation;
166	166	(2) a record of any further action taken; and
167	167	(3) an announcement by the presiding director at the
168	168	beginning and end of the session indicating the date and time.
169	169	(j) Subsections (e), (f), (g), (h), and (i) apply to an
170	170	electric cooperative with more than 170,000 members.
171	171	(k) Each electric cooperative with not more than 170,000
172	172	members shall hold an election every five years on the question of
173	173	whether to make Subsections (e), (f), (g), (h), and (i) applicable
174	174	to the electric cooperative.
175	175	SECTION 6. Subchapter B, Chapter 161, Utilities Code, is
176	176	amended by adding Section 161.0751 to read as follows:
177	177	Sec. 161.0751. NOTICE OF BOARD MEETINGS. (a) The board
178	178	shall give members notice of the date, hour, place, and planned
179	179	agenda of a regular or special board meeting. Notice of a board
180	180	meeting must be given at least three days before the scheduled time
181	181	of the meeting by:
182	182	(1) posting a notice on a bulletin board in a place
183	183	convenient to members at the electric cooperative's main office and
184	184	at each district office;
185	185	(2) posting a notice on the cooperative's Internet
186	186	website, if the cooperative maintains a website; and
187	187	(3) providing a copy of the notice to a member on a
188	188	request by the member.
189	189	(b) In the event of an emergency or urgent matter, notice
190	190	may be given in the manner prescribed by Subsection (a) at any time
191	191	before a regular or special board meeting is convened. An action
192	192	taken by the board at a meeting for which notice is given under this
193	193	subsection must be ratified by the board at the next meeting for
194	194	which notice is given under Subsection (a)
195	195	SECTION 7. Section 161.077, Utilities Code, is amended by
196	196	adding Subsection (d) to read as follows:
197	197	(d) The provisions of this chapter that apply to the board
198	198	also apply to the executive committee.
199	199	SECTION 8. Subchapter B, Chapter 161, Utilities Code, is
200	200	amended by adding Sections 161.080, 161.081, and 161.082 to read as
201	201	follows:
202	202	Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS. (a) (a)
203	203	Except as provided by Subsection (c), a member of an electric
204	204	cooperative may, at any reasonable time and on written request that
205	205	states a proper purpose for the request, inspect and copy the books
206	206	and records of the cooperative relevant to that purpose.
207	207	(b) An electric cooperative may charge a member for the cost
208	208	of providing information under Subsection (a).
209	209	(c) An electric cooperative may limit or deny a member's
210	210	request to inspect its books and records if the member:
211	211	(1) does not meet the requirements of Subsection (a);
212	212	(2) seeks information the release of which would
213	213	unduly infringe on or invade the privacy of a person;
214	214	(3) seeks information related to a trade secret;
215	215	(4) seeks personnel information the disclosure of
216	216	which would violate the law or constitute a clearly unwarranted
217	217	invasion of personal privacy;
218	218	(5) seeks information related to:
219	219	(A) pending or reasonably anticipated
220	220	litigation;
221	221	(B) a real estate transaction for a project that
222	222	has not been formally announced or for which contracts have not been
223	223	formally awarded;
224	224	(C) the cooperative's competitive activity,
225	225	including commercial information and utility-related matters that
226	226	would, if disclosed, give an advantage to a competitor or
227	227	prospective competitor; or
228	228	(D) the security of the cooperative's electrical
229	229	system; or
230	230	(6) seeks information that is confidential,
231	231	privileged, or proprietary.
232	232	Sec. 161.081. POLICIES AND AUDIT. (a) The board shall
233	233	adopt written policies relating to:
234	234	(1) travel expenditures for board members, officers,
235	235	and employees;
236	236	(2) reimbursement of expenses for board members,
237	237	officers, and employees;
238	238	(3) conflicts of interest for board members, officers,
239	239	and employees;
240	240	(4) whistleblower protections;
241	241	(5) criteria and procedures for the selection,
242	242	monitoring, review, and evaluation of outside vendors or contracted
243	243	professional services;
244	244	(6) budgets for use in planning and controlling costs;
245	245	and
246	246	(7) the creation of a committee that audits the
247	247	actions of the board.
248	248	(b) An electric cooperative shall provide for an
249	249	independent financial audit, to be performed annually by an
250	250	unaffiliated entity that is professionally qualified to perform
251	251	such an audit.
252	252	Sec. 161.082. COMPLAINTS BY MEMBERS. (a) A member may file
253	253	a written complaint with the general manager of the electric
254	254	cooperative if the member is aggrieved by an action of the board or
255	255	by an employee of the board or of the cooperative that the member
256	256	alleges infringes on a right of the member under Sections 161.072,
257	257	161.075, 161.0751, 161.080, 161.081, and 161.126.
258	258	(b) Not later than the 20th day after the date the general
259	259	manager receives a complaint under Subsection (a), the general
260	260	manager shall take corrective action regarding the complaint, if
261	261	the general manager determines that the action complained of
262	262	infringed on the member's rights under Sections 161.072, 161.075,
263	263	161.0751, 161.080, 161.081, and 161.126.
264	264	(c) If the general manager determines that the action
265	265	complained of did not infringe on the member's rights under this
266	266	chapter, or if the general manager otherwise fails to resolve the
267	267	member's complaint to the member's satisfaction before the 21st day
268	268	after the general manager receives the member's complaint, the
269	269	member may file a written complaint with the attorney general's
270	270	consumer protection division. A complaint filed with the attorney
271	271	general under this subsection must:
272	272	(1) identify the electric cooperative by name and
273	273	address;
274	274	(2) describe in detail the nature of the member's
275	275	complaint; and
276	276	(3) include copies of documents relevant to the
277	277	member's complaint, including:
278	278	(A) any relevant written request made by the
279	279	member to the cooperative;
280	280	(B) the written complaint made by the member to
281	281	the general manager under Subsection (a); and
282	282	(C) any relevant response from the cooperative
283	283	regarding a request or complaint.
284	284	(d) In reviewing a member's complaint under this section,
285	285	the attorney general may request that the cooperative provide to
286	286	the attorney general any information relevant to the complaint.
287	287	The attorney general must give a cooperative a reasonable
288	288	opportunity to inspect and copy the requested information before
289	289	providing the information to the attorney general. The attorney
290	290	general shall designate an employee of the office of the attorney
291	291	general to be the person responsible for receiving, inspecting, or
292	292	copying information received under this subsection.
293	293	(e) An electric cooperative shall cooperate with a request
294	294	for information under Subsection (d) and promptly provide the
295	295	requested information to the attorney general's designated
296	296	employee. The attorney general may not disclose to any person
297	297	information provided by a cooperative in response to the request
298	298	unless:
299	299	(1) the attorney general is required by a court to
300	300	provide the information to the person;
301	301	(2) the person is an authorized employee of the office
302	302	of the attorney general; or
303	303	(3) the cooperative that provided the information
304	304	consents to the disclosure.
305	305	(f) The attorney general shall return to a cooperative any
306	306	information provided under this section that is confidential or
307	307	sensitive to the cooperative.
308	308	SECTION 9. Subchapter C, Chapter 161, Utilities Code, is
309	309	amended by adding Sections 161.126 and 161.127 to read as follows:
310	310	Sec. 161.126. PROHIBITION ON ACQUISITION OF GENERATOR
311	311	CAPACITY BY CERTAIN ELECTRIC COOPERATIVES. An electric cooperative
312	312	with more than 170,000 members that provides retail electric
313	313	service may not acquire equipment capable of generating electricity
314	314	for sale other than equipment that uses an alternative energy
315	315	resource unless the Public Utility Commission of Texas first
316	316	approves of the acquisition. The commission by rule shall
317	317	establish the standards and procedures by which it will approve an
318	318	electric cooperative's acquisition of electric generation
319	319	capacity.
320	320	Sec. 161.127. NOTIFICATION OF CERTAIN INVESTMENTS. Not
321	321	later than the 30th day following the completion of a transaction
322	322	that results in an electric cooperative or an affiliate of the
323	323	cooperative creating or acquiring an interest in an entity that
324	324	does not generate, transmit, or distribute electricity, the
325	325	cooperative shall provide a notice to members that contains:
326	326	(1) the name of the entity;
327	327	(2) a description of the entity;
328	328	(3) the reasons for the decision to enter into the
329	329	transaction;
330	330	(4) a description of the costs associated with the
331	331	transaction, and the method of financing for those costs; and
332	332	(5) a description of the anticipated effect the
333	333	transaction will have on the cooperative's electric energy rates or
334	334	prices.
335	335	SECTION 10. (a) The changes in law made by Section 161.072,
336	336	Utilities Code, as amended by this Act, apply only to a director
337	337	election held on or after the effective date of this Act. A
338	338	director election held before the effective date of this Act is
339	339	subject to the law in effect on the date the election is held, and
340	340	that law is continued in effect for that purpose.
341	341	(b) The changes in law made by Section 161.075, Utilities
342	342	Code, as amended by this Act, and by Section 161.0751, Utilities
343	343	Code, as added by this Act, apply only to a meeting convened on or
344	344	after the effective date of this Act. A meeting convened before the
345	345	effective date of this Act is subject to the law in effect on the
346	346	date the meeting is held, and that law is continued in effect for
347	347	that purpose.
348	348	(c) The changes in law made by Sections 161.080 and 161.082,
349	349	Utilities Code, as added by this Act, apply only to a request to
350	350	inspect records submitted on or after the effective date of this
351	351	Act. A request submitted before the effective date of this Act is
352	352	subject to the law in effect on the date of the request, and that law
353	353	is continued in effect for that purpose.
354	354	(d) The changes in law made by Section 161.127, Utilities
355	355	Code, as added by this Act, apply only to a transaction that is
356	356	completed on or after the effective date of this Act. A transaction
357	357	that is completed before the effective date of this Act is subject
358	358	to the law in effect on the date the transaction is completed, and
359	359	that law is continued in effect for that purpose.
360	360	SECTION 11. Not later than December 31, 2010, each electric
361	361	cooperative with not more than 170,000 members shall hold an
362	362	election as required by Section 161.075(k), as added by this Act.
363	363	SECTION 12. This Act takes effect September 1, 2009.